RIMM Rising: Street Mulls January 30th Debut; Vapor Ware?

By Tiernan Ray

A few Street prognosticators weighed in today on Research in Motion‘s (RIMM) announcement this morning that it will debut its long-awaited update to the BlackBerry, “BB10,” at an event on January 30th, along with two new pieces of hardware to run the software.

The announcement has given a lift to the shares today: the stock is currently up 28 cents, or 3.3%, at $8.82 and was up 7% in pre-market trading.

Jennifer Fritzsche with Wells Fargo, who has a Market Perform rating on RIM stock, writes that RIM still has good will to ride in the marketplace:

While it is clearly an uphill battle for RIMM given the recent launch of the iPhone 5 device and the aggressive marketing dollars being pushed toward Windows 8, we view it as a modest positive that a date is now officially set for the launch of the new BB10 devices. At our TMT conference last week, both VZ and T senior management expressed enthusiasm to having a third OS system. While we believe more of this near term enthusiasm is directed towards Windows, carriers seem to recognize the loyal (but shrinking) base, RIMM still has in the marketplace.

Raymond James’s Tavis McCourt, who has a Market Perform rating on the stock, writes that he thinks the handsets will go on sale in March:

RIM announced this morning that it will hold a launch event for BlackBerry 10, its new operating system, on January 30. The event will happen simultaneously in multiple countries. RIM will unveil its initial two smartphones using the platform (1 full touch screen, 1 QWERTY keyboard). We expect this likely indicates March launches for the handsets, in line with RIM’s most recent guidance. Interestingly, the OS has already received FIPS 140-2 approval, which means U.S. government agencies can buy at launch (first time for RIM). RIM also announced that 50 carriers have the devices in certification.

Mark McKechnie of Evercore Partners, who has an Equal Weight rating and an $8 price target, writes that the battle for a third-place among “ecosystems” in mobile is a tough one, and suggests the BB10 announcement points to a certain desperation:

Vapor Ware to hold onto its subscriber base? We are puzzled by the announcement of a launch event a month and a half in advance. We take it as a strategy for RIMM to hold onto its remaining “die hard” Blackberry users (RIMM had ~ 80M global subscribers as of the end of its August quarter) in the US lest they cut over to the new iPhone or Android devices. We do believe RIMM could run into the danger of “Osborning” itself – i.e. RIMM’s existing phone sales could fall off even more as its existing customers hold off on hardware purchases as they await new products ahead […] While we are encouraged by RIMM sticking to its Q1 ship date for Blackberry 10, we believe it is still engaged in a challenging battle for third place in the ecosystem battle with MSFT/WindowsPhone and behind iOS and Android.

R.W. Baird’s William Power, who has an Underperform rating and a $7 price target, notes some positives about the forthcoming platform, while reiterating his concerns about the near-term outlook without new product to sell:

On a positive note, RIM’s BlackBerry 10 platform appears to contain a number of features that distinguishes it from iOS and Android, including BlackBerry Hub, BlackBerry Keyboard, and BlackBerry Balance, though whether the platform can attract consumers and developers this late in the game remains to be seen […] Although a firm BlackBerry 10 launch date is positive for RIM, we continue to expect a challenging holiday season for RIM, as its older device portfolio competes the iPhone 5 and Samsung Galaxy S III.

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